End to US govt shutdown may be near; ANZ earnings loom

ASX futures are pointing to a positive start to the week when stock markets open across the Tasman as US policymakers step up efforts to end the longest federal government shutdown in history, with prediction market Polymarket pricing in a greater chance of a deal being reached this week.

The prospect of US federal government workers returning to work spurred a late gain for Wall Street on Friday, although the tech-heavy Nasdaq Composite remained in the red, marking its worst week since early April as investors remain wary of increasingly expensive valuations backed by the artificial intelligence boom, with Amazon the only one of the Magnificent 7 megacap stocks having a positive week.

Meanwhile, ANZ Group Holdings is the latest major lender reporting earnings today, having signalled hefty one-off charges from its plans to lay off 8% of its workforce and a settlement with the Australian Securities & Investments Commission.

And Vital Healthcare Property Trust is said to be eying up a capital raising, with a report across the Tasman that the healthcare property landlord is considering internalising its management contract.

The end is nigh

Australian futures are pointing to a 0.3% gain for the S&P/ASX 200 index when trading opens across the Tasman, following the late turn on Wall Street that saw the S&P 500 end Friday up 0.1% on growing optimism US policymakers will find a way to end the longest federal government shutdown in history.

Prediction market Polymarket is pricing in a 38% chance of the shutdown ending between Nov 12 and 15, up from 27% on Saturday.

“The S&P declined by close to 1.5% on Friday, before staging a recovery, after Senate Democrats scaled back their demands to end the government shutdown,” Bank of New Zealand senior interest rate strategist Stuart Ritson said in a note. “Investor sentiment had been impacted by signs of weakness in the US labour market and falling consumer confidence.”

The late turn wasn’t enough to turnaround a soft week on Wall Street, with the S&P 500 down 1.6% and the tech-heavy Nasdaq posting its steepest fall since early April when it dropped 3%.

Amazon was the only one of the Magnificent 7 megacap stocks to post a positive week, buoyed by a solid result and a cloud services supply deal with OpenAI, with chipmaker Nvidia sinking 7.1% last week.

Making money

That’s come as corporate earnings have outperformed expectations, with FactSet analysis showing 82% of firms have beaten analysts’ earnings forecasts, with 91% of the S&P 500 having reported their quarterly results so far.

Sharesies' favourite Rocket Lab is scheduled to report on Monday in the US after the close of trading.

Stock markets in Europe ended the week in the red, with the UK’S FTSE 100 down 0.6% on Friday, Germany’s DAX 30 falling 0.7% and France’s CAC 40 down 0.2%.

New Zealand’s S&P/NZX 50 index notched up a 0.4% gain last week, while the kiwi dollar traded at 56.26 US cents 7am in Auckland from 56.19 cents on Friday.

ANZ Group Holdings will attract attention today as with the lender poised to report its earnings, having signalled A$1.11 billion of one-off charges from the likes of its widespread restructuring, trimming its workforce by 8%, settlements with ASIC, and impairments on PT Bank Pan Indonesia.

The local shoulder earnings season picks up this week, with minnow employment software firm Paysauce reporting its first-half result today, while Mainfreight and Infratil and scheduled for later this week.

Vital Healthcare Property Trust is said to be considering raising money to bring its management contract inhouse, according to a report in The Australian’s DataRoom column. The manager’s chair Graham Stuart told unitholders at last week’s annual meeting that independent directors have been talking to NorthWest over the years, but haven’t been able to reach commercial terms.

Reporting by Paul McBeth. Image from Curious News.